Trans and gender-diverse Victorians now have the freedom to choose the gender shown on their birth certificates without reassignment surgery.
New laws came into effect on Friday, after clearing state parliament with a 56-27 vote last August.
Transgender Victoria’s Executive Director Margot Fink said the new laws represented a "huge relief" for non-binary and gender-diverse people.
"The previous restrictions often meant members of our community were placed at risk of outed or being endangered by documents that did not reflect their true gender, and this reform improves the safety, autonomy, and equality of trans and gender diverse people in Victoria," she said.
"It’s fantastic to see the daily lives of trans and gender diverse Victorians and our loved ones meaningfully improved by this reform."
It took two attempts to pass the bill, with an earlier version being voted down in 2018.
Under the new law, an individual has to include a statutory declaration when applying to change the gender recorded on their birth certificate.
Applicants have to include a statement from another person who has known them for at least one year and supports the application.
The laws also allow minors to change their sex descriptor with parental permission.
Victoria is the fifth state or territory to pass such legislation, which recognises that some transgender or gender-diverse people don't want to undergo surgery, or are unable to.
Tasmania, the Northern Territory, South Australia and the ACT had already passed similar laws.
Additional reporting by Claudia Farhart.